Realization plus cash‑flow tax beats wealth tax

An Econometrica paper (Aguiar, Moll, Scheuer) shows that combining a realization‑based capital gains tax with a tax on cash flows can implement the same optimal redistribution as comprehensive (Haig‑Simons) income taxation while avoiding the portfolio 'lock‑in' distortions and irrespective of why asset prices move. The paper finds wealth or accrual taxes perform worse in this model that accounts explicitly for asset‑price movements driven by discount‑rate changes. — If robust, the result reframes the policy debate: governments can target redistribution without a recurring wealth tax, changing political feasibility, administrative priorities, and campaign arguments over taxing the rich.